PRECEDENTS ONLINE

Franchise Agreement Template

A Franchise Agreement Template and Master Franchise Agreement Template in word format.  Australian Owned & Lawyer Drafted.

Australian Owned

Written by Lawyers

Money Back Guarantee

No Memberships

FRANCHISE AGREEMENT

A Franchise Agreement that also includes for free:-

+ Franchise Checklist

+ Franchise Code of Conduct

+ Free Franchise Book by Eric Kalde

+ Commentary

+ Franchisee Due Diligence

+ Franchise Information Statement

+ Franchise Disclosure Document

VIEW PAGE AND DOWNLOAD

MASTER FRANCHISE AGREEMENT

A Master Franchise Agreement. Master franchising is popular with service franchises.  Service franchises are those which involve the franchisee selling services rather than goods.

 

VIEW PAGE AND DOWNLOAD

Precedents Online sells legal documents to the legal profession in Australia. The online legal documents are supplied by Kalde Pty Ltd. Most of the copyright in the works available on this site vests in Kalde Pty Ltd and the documents themselves have been created by practising lawyers.

Legal precedents sold on this site are available for immediate use.  Precedents shown on this site have been drafted by practicing lawyers and kept up to date with changes in the law.

Precedents Online. Powered by Kalde & Associates Commercial Lawyers.

Franchise Agreement Template

(This is not Legal Advise by Precedents Online or their Authors)

  1.  General Law Governing Franchising

The term ‘franchising’ is normally used in connection with either a business format form of franchise or in connection with a product and trade mark franchise.  Under a business format form of franchise, the Franchisor grants to the franchisee not only the right to use the franchisor’s trade marks but also the right to use an entire business format in accordance with which the franchisee must carry on their business.  

Franchising in Australia is governed by the Franchising Code of Conduct.  The Franchising Code of Conduct is a mandatory industry code of conduct that has the force of law under theCompetition and Consumer Act 2010 (Cth).

The definition of ‘franchise agreement’ in the Franchising Code of Conduct is wide.  An agreement exhibiting the features specified in Clause 4(1) of the Code, will be a franchise agreement for the purposes of the Code.

  1.  The Code

The Franchising Code of Conduct is contained in a Schedule to the Trade Practices (Industry Codes — Franchising) Regulations 1998 (the Code).  A Franchising Code of Conduct compliance manual for franchisors and master franchisees is available free of charge from the Australian Competition and Consumer Commission website www.accc.gov.au.

2.1  Disclosure

Under the Code, franchisors and master franchisees (or sub-franchisors as they are sometimes known) must give a franchisee the following documents at least 14 days before the franchisee enters into, renews or extends a franchise agreement or pays a non-refundable deposit in relation to a franchise agreement:

a)  A copy of the code.

b)  A disclosure document in the required form.

c)  A franchise agreement in the form it is to be executed.

The Code also requires that a franchisor:

i)   Informs the franchisee of any materially relevant facts about the franchise (for example, certain court proceedings) within 14 days after the franchisor becomes aware of them.

ii)   Gives a copy of a current disclosure document to the franchisee within 14 days after a written request to the franchisor, as long as only one request has been made within the last 12 months, not including a request made under a right of renewal. 

Long and short form Disclosure Documents can be downloaded for free from the Australian Competition and Consumer Commission website www.accc.gov.au.

2.2  Franchise agreements

The Code gives franchisees certain rights.  In particular:

a)  A cooling off period.  A franchisee may terminate a franchise agreement within 7 days after entering the agreement, or paying any non-refundable money, whichever is earlier.  If the franchisee exercises their cooling-off period, they must be given a refund minus any reasonable expenses incurred by the franchisor within 14 days.

b)  Freedom of association.  A franchisor is prohibited from preventing franchisees forming an association.

c)  No general release.  A franchise agreement entered into on or after 1 October 1998 must not contain, or require a franchisee to sign a statement that releases the franchisor from general liability towards the franchisee.

d)  No waivers.  A franchise agreement must not contain, or require a franchisee to sign, a waiver of any verbal or written representation made by the franchisor. 

Precedents

 Franchise agreement checklist
 Franchise agreement
 Guarantee and indemnity (Annexure A to Francise agreement)
 Non competition covenant (Annexure B to Franchise agreement)
 Covenants for a sublease (Licence to occupy premises)

2.3  Dispute resolution

Every franchise agreement must have a dispute handling procedure that complies with the Code.  Any party to a franchise agreement who has a dispute with another party to the agreement may engage the Code’s dispute resolution procedure.  The Office of the Franchising Mediation Adviser provides mediators for resolving disputes using the dispute resolution procedure set out in the Code.

  1. Master Franchising

Master franchising is popular with service franchises.  Service franchises are those which involve the franchisee selling services rather than goods.  Service franchises are common in the home services, cleaning and courier industries.  Often there will be no retail premises involved, with the franchisee operating from home.  The use of a vehicle will be a critical element of the franchise.

A feature of service franchises is the high number of individual franchisees.  To avoid creating a large head office bureaucracy master franchising can be used to delegate the responsibility of growing, developing and monitoring the network in a territory to a master franchisee.

The definition of ‘franchisor’ in Clause 3 of the Code includes a master franchisee.  Clause 3also states that ‘subfranchisor has the same meaning as master franchisee’. 

The grant of a master franchise is very similar to the grant of a franchise.  However, the terms of the master franchise and the responsibilities of the master franchisee are different from those of a franchisee.  A franchisor must provide a master franchisee with a disclosure document, a cooling off period and other arrangements applicable to franchisees under the Code.

While a master franchisee is entitled to receive a disclosure document, the Code is not clear about whether it must also provide one to franchisees.  The better practice is to do so, particularly if the master franchisee is a party to the franchise agreement.

3.1  Structure of Master Franchise

The master franchise arrangement can be structured in such a way that the master franchisee can be a prime contracting party, an agent of the franchisor, or a joint contracting party.  The franchisor will normally wish to protect the business format, systems and image that the franchisor has developed, but otherwise the nature of the master franchising arrangement can be structured to suit the needs of the particular network.

When creating master franchise arrangements consider the prohibition of Pyramid selling schemes in Division 3 of the Australian Consumer Law.  This prohibition may well render some methods of master franchising illegal.

3.2  Content of master franchise agreements

The Code imposes the same obligations upon a franchisor concerning the content of a master franchise agreement as apply to the content of a franchise agreement. A ‘franchisee’ is defined in clause 3 of the Code to include ‘a subfranchisor in its relationship with a franchisor’.

Precedent

 Master franchise agreement

  1.  Sale of Franchise

The Code imposes certain restrictions and obligations upon a franchisor and a franchisee in connection with the transfer or assignment of a franchise and the sale of a franchised business.

Clause 20 of the Code deals with the process of transfer of a franchise.  Sometimes transfer of a franchise is referred to as ‘novation’ of a franchise.  A franchisee may make a request t for the franchisor’s consent to transfer and the franchisor may not unreasonably withhold consent.

The franchisor is deemed to have given consent to the transfer if the franchisee or does not, within 42 days after the request was made, give to the franchisee written notice that consent is withheld. Reasons must be given.

The circumstances in which it is reasonable for a franchisor to withhold consent include the following:

a)  The franchisee has breached the franchise agreement and has not remedied the breach.

b)  The franchisee has not paid or made reasonable provision to pay amounts owing to the franchisor.

c)  The proposed transferee does not meet the selection criteria of the franchisor.

d)  The proposed transferee is unlikely to meet the financial obligations that the proposed transferee would have under the franchise agreement.

e)  The proposed transferee does not meet a reasonable requirement of the franchise agreement for the transfer or novation of a franchise.

f)  Agreement to the transfer or novation will have a significantly adverse effect on the franchise system.

g)  The proposed transferee does not agree in writing to comply with the obligations of the franchisee under the franchise agreement.

Procedure for transfer of a franchise

  1. Check terms and conditions of the franchise agreement itself in relation to  what is required for  transfer.
  2. Vendor issues the franchisor’s current disclosure documents to the purchaser.
  3. Purchaser returns acknowledgement of receipt of the disclosure documents. 
  4. Franchisor conducts due diligence in respect of the proposed transferee.
  5. Purchaser (transferee) conducts due diligence of franchise business.
  6. Franchisor gives decision regarding consent within 42 days of request.
  7. Sign transfer documents.

Precedents

 Sale of franchise checklist
 Deed of consent 

 

 

© Copyright Kalde Pty Ltd, 2010, Sydney. All rights reserved.

Last Updated: 15/05/2012

 

Disclaimer

 

I have been using Precedents Online for quite some time now for all my family wills, trusts and also when I started my business up with shares and found the documents very helpful.  I also was able to get immediate response to any questions I had relating to those downloads.  Love how easy it is.  

John Eussen – Eussen Living Pty Ltd

 

Great service. Fast response and a good price.

Easy to follow the download procedure.  

Would definitely use again.

Jim – Director – Domain Tax Accounting

 Contact us :-  Support@precedentsonline.com.au

Thinking of Starting a Business?

By Eric Kalde KALDE LEGAL  This is a book about starting a business. It provides a map, compass and checklist for starting a business from the ground up. I explain the process, and recommend the order in which you do things. I make suggestions about important...

A new LEASE on life

Are you likely to get any rent concession from your landlord?  Probably not and these are the reasons why? Statutory (Covid) rent concessions do not apply to new leases. In renewing your lease you are entering into a new lease. You are therefore not entitled to any...

Why you need a Power of Attorney especially in Covid-19

Support For Individuals, Couples, & Families Why do I need a Power of Attorney? The starting point is to have your loved one authorise you or someone they trust to act on their behalf through both a power of attorney for financial affairs and enduring...

Prenups can cut financial stress in blended families.

Prenups Prenups can cut financial stress in blended families Second marriages have a greater failure rate than first marriages. How often are the step children blamed for scuttling the relationship? There are many issues but one of them is almost certainly financial....

What are Binding Financial Agreements? Are they worth it?

Binding Financial Agreements   There are many names for Binding Financial Agreements, including; Pre-nuptial Agreements (commonly known as pre-nups), Post-nuptial Agreements (post-nups); and Cohabitation Agreements. They are known by the courts as Binding...

Should you Advertise Online?

Get Started with an Online Advertising Agreement Advertising Online Thinking of a advertising your business online with a ‘provider’ company’s site in exchange for fees. You should have this agreement that covers: Terms Of Payment GST Positioning And Display Criteria...

Buy Sell Agreement – Why You Need One?

It's Like A Pre-nup for your Company When you got married, you may have signed a binding financial agreement in the hope this would never be put into fruition. You hoped the marriage would last, but you are realistic.  You took the necessary steps to make sure your...

Selling Shares? Here is a checklist for you.

Download for a limited time your free Share Sale Agreement Checklist.   Shares in a company might be purchased for several reasons.  Shares are sold as an investment, or as a means of acquiring a stake in a company. Buying shares in a company is also a way to  take...

How to negotiate an employment contract

How to negotiate an employment contract An employment contract is far more than just an agreed upon salary and vacation clause. An Employment contract contains all the terms and conditions upon which you’ll become employed. When it comes to negotiating an employment...

Financial Agreements What You Need to Know

Binding Financial Agreements What you Need to Know   Financial Agreements are private agreements, between parties to a marriage or a de facto relationship. They can be made prior to, during or after separation or divorce of a de facto relationship. Binding Financial...

Selling your business?

Getting Ready for Sale Selling Your Business - Some helpful hints Maximise the selling price of your business before you list it for sale. Listing your business for sale without checking the things purchasers will look for first will cause you problems. The sale will...

Small Business & The Law

Small Business & The Law. WHY YOU MUST COMPLY The law (ASIC)  enforces that a small business must comply under the laws whether you are a small business, business name or a registered company in Australia.  As the business owner, you are responsible to comply with...

Buying Real Estate? Some Legal Essentials…..

Legal Essentials Understanding the process of buying real estate & avoiding the common trapsGET YOUR FREE BOOKLET Visit our Conveyancing Documents: - ...

Start Up – Starting a Business by Eric Kalde

By Eric Kalde KALDE LEGAL  This is a book about starting a business. It provides a map, compass and checklist for starting a business from the ground up. I explain the process, and recommend the order in which you do things. I make suggestions about important...

Trusts Bundle

Trust me......   Trusts have proven to be a powerful asset protection tool for those who have them. A fact that was brought to light in the pandemic. We have seen a dramatic increase in inquiries as people realise how valuable they can be.  A trust can be created...

Leasing and Covid 19 – what happens next?

  The National Cabinet Mandatory Code Of Conduct has now passed into law.  Landlords and tenants have been negotiating agreements regarding rent and shutdowns due to the coronavirus. There is now legislation governing payment of rent during the current economic...

Do commercial tenants still need to pay rent?

  This is one of the questions landlords and tenants have been asking since the Government announced a Code of Conduct in early April. Implementing the Code has have proved to be more difficult than at first thought. The National Cabinet Mandatory Code Of Conduct came...

Bundle your Sale of Business and Save!

Bundle your Sale of Business and Save! There is more than one way to sell your business. We have more than one kind of Contract. Whether its an asset sale or a sale or shares in company as well we have all the types of contract you are likely to need. Buy more than...

The 5 Most Important Loan Contract Terms

The five most important Loan Contract Terms. Understand your loan documents. Loan documents are packed with details. Important terms are spread throughout a loan agreement. If you don’t understand the technical aspects, ask your lawyer to go over it for you. Loan...